Economy is only another word for Management; good Management. It is a science of exact quantities; an orderly and methodical arrangement by which all parts are adapted to secure the maximum of good result, by the minimum of outlay. It is a method which avoids waste and extravagance; the art of making the most out of everything, and applying the money so made to the best advantage.

Economy must never be pushed to the verge of parsimony. There is no need for such a thing. The truly economical man can afford to be liberal; and the Firm which manages its business with prudence and Economy, will always be able to pay its employés well; provide them with proper tools and materials for their work; and give them comfortable surroundings. Where real Economy is practised, there is no occasion for bullying and driving workmen; for starving them in tools and supplies; nor for working them long hours; and the result is the creation of a higher status of character among them.

Economy in its best sense means the saving of waste and the avoidance of unnecessary expense, whether in the management of the nation, the warehouse, the workshop, or the home.

It is too often the case, however, that a man who tardily takes steps to economise because of diminished profits, or because of heavy losses, starts at the wrong end. Faithful and skilful workmen of long experience are discharged, or allowed to leave, for the sake of saving a few

FOOLISH METHODS

shillings in wages; although far more is often lost afterwards through the bad work and mistakes of the inexperienced boys, or 'ne'er do well' men, who take the places of the old hands.

Then the materials bill is overhauled; but in the case of many businesses attempts are made to get a penny or two per foot, or per yard, or per pound, reduction on things used, resulting in spoilt work and waste materials, more than outbalancing the difference in price between good and poor stuff. Far more might have been saved by overhauling the scrap heap, to see if the stuff was being cut to advantage; or whether excessive margin was being allowed for trimming. It is the same with many other things. In a certain business we are acquainted with the dealer is screwed down to the last farthing profit per ounce for a certain article; and yet the waste of it in many businesses is most serious. In the matter of gas and electric light, too, the waste is enormous, even in well-managed business houses.

Another wrong way of economising is in the reduction of Office expenses, leading too often to mistakes in charging, delays in delivery, and often loss of customers. 'Sacking' the traveller is a favourite way of economising; with the result that he carries off perhaps half the business to a rival Firm. Not less foolish is cutting down advertising expenses, especially in any Firm where advertising has been the making of the business. If you leave off advertising you will soon be forgotten. You deserve to be.

The essence of true Economy has been well summed up in a few words : 'The principal thing in matters of Economy is to cut off all superfluous expenses; but true husbandry doth lie in expending the same money to more advantage than another; and as the vulgar say, "to have four pennies for your groat."

About Giving Credit

"Creditors have better memories than debtors."FRANKLIN.

MANY a business man has no doubt often exclaimed to himself, with a sigh, 'If only I could get all my money in I should be a rich man.' Many a man, too, with this feeling strong in his mind, has straightway started the ruin of his business by making a desperate attempt to get money in, reckless of consequences.

The question of giving Credit is one of the most difficult problems, indeed one of the greatest worries, a business man has to face; yet it must be faced, and faced boldly.

To begin with, it is no good theorising about the advantage of doing Business on a cash basis. We would all do it that way if we could; but we can't do it. Even if you have a monopoly, you can't do it; because if a Firm with a monopoly refuses to give Credit, there is a loophole left for another firm to come in and do the same kind of Business on a Credit basis.

And, by the way, is it not surprisingly easy to

A COMMON ERROR

do Business if you give unlimited Credit to every Tom, Dick, and Harry who comes along? Why, any fool can do Business that way, so long as his money (or, usually, somebody else's money) lasts. Such a man generally attributes his failure to want of capital; he argues that if only he had more capital he could afford to give Credit and wait. This latter idea is a common mistake. The fact is that good management, with a little capital, is more likely to lead to Success than an abundant capital without the good management.

There are many examples of men with no capital, or with very little, being always punctual in their payments; their word as good as their bond; whilst others, with an abundance of capital, are never to be depended upon.

Granted, then, that Business cannot be done without giving Credit, how are we to decide when to give Credit; to whom to give Credit; and what term of Credit to give?

To begin with, no man ought to be in Business -certainly not in the position of deciding about giving Credit-who cannot read at least some of the riddles of human nature; who cannot judge approximately a customer's character at sight; or who cannot judge the traits of customers at a distance by reading between the lines of correspondence. A good business man should train himself to look at all matters upon which he is called upon to decide with a judicial frame of mind.

It is no good giving any rules how to decide about giving Credit. Suffice it to say: 'You must know

your man.' But before promising to give credit tell him your terms or ask him what Credit he wants. Then request references as to his ability to fulfil your terms or his promises. If a man cannot give references, he must give evidence of his means, or furnish security.

These are the cardinal laws of Business, and no sensible man can object to them. Beware of the man who tries to 'bluff' you with such remarks as 'Everyone knows me; there's no need for a reference.'

In a few words, don't shirk this matter of getting an understanding about terms beforehand. You can always hold a man up to his promises; whereas if he has no arrangement he can wriggle out by saying he did not know your terms.

Having arrived at a good preliminary understanding, be careful not to have any questions about prices or delayed invoices; nor disputes about unaccepted goods; all of which will furnish excuses for non-payment at the proper time. Be prompt in sending monthly statements of accounts. Have them out by the first of the month. If a man has exceeded your terms, remind him of it. If he takes no notice, remind him again. Give him a third and fourth notice; and if he still has not the courtesy to reply, hand him over to your lawyer. He deserves it. A legitimate excuse will be accepted by most good business houses; and a frank acknowledgment of a difficult position from an honourable man will invariably be treated with proper respect.